Ethanol craze brings unintended consequences

WASHINGTON — The historical significance of corn in the Americas is comparable to that of rice in China or wheat in the Middle East. Corn is more than a staple, it is part of the region's DNA — which explains the hysteria in many Latin American countries over rising prices.

In just four years, leaders and organizations that style themselves as progressive have gone from denouncing the precipitous fall in the price of corn to denouncing its sharp climb — with many of the same arguments! Hardly a week goes by in which Cuba's Fidel Castro or Venezuela's Hugo Chavez is not accusing rich imperialists of deliberately pumping up the price of corn in order to impoverish Latin Americans. But in 2003, when corn prices were dropping dramatically, Phil Twyford of Oxfam, a left-oriented humanitarian organization, pontificated, "The Mexican corn crisis is another example of world trade rules that are rigged to help the rich and powerful, while destroying the livelihoods of millions of poor people."

The rise in corn prices since 2006 has much to do with the synthetic fuel ethanol, which is made from a corn base or from sugar cane and is heavily subsidized by the United States and Europe. But there are other elements in play. Protectionism, such as Guatemala's 20 percent tariff on corn imports, is one other reason why Latin Americans find it harder to buy tortillas. In Mexico, indirect price controls have caused shortages of white corn.

Unquestionably, the ethanol craze will continue to have an impact on Latin America's children of corn. The push for clean energy in the developed world has turned the public's attention to biofuels, signaling to politicians and investors, including conservatives, that ethanol and other such products are the fuels of the future. If anyone is to blame for the doubling of the price of corn that took place in 2006, it is "green" activists — many of whom admire those Latin American leaders who are now denouncing the imperialist conspiracy against tortillas.

Latin America is discovering a contradiction between promoting alternative energy and keeping food cheap. Some countries such as Brazil have a vested interest in producing ethanol because they grow lots of sugar cane. Mexicans for their part have a vested interest in keeping things as they used to be because they eat tortillas and their country is a major oil producer. And there are those, such as the Central American nations, that have contradictory interests — they would like to replace carbon fuels with ethanol because they currently depend on crude oil imports, but they want the price of corn to remain low because, as Rigoberta Menchu, the

Guatemalan Nobel Prize laureate, is fond of saying, corn "is part of our dignity."